BAT will be engaging with its shareholders to better understand their perspectives on the management of executive pay, the company announced in a press note.
At the company’s, annual general meeting on April 28, 2021, significant minorities voted against resolutions dealing with directors’ remuneration and authority to allot shares.
Nearly 40 percent of shareholders voted against Resolution 2—Directors’ Remuneration Report. “Whilst we note that the decisions taken by the remuneration committee have been supported by the majority of our shareholders, we do recognize that a significant minority of shareholders and some shareholder advisory bodies have not been supportive of these decisions, in particular, fixed pay increases awarded to executives in 2020 and 2021,” BAT wrote. “This has been taken on board by the committee, and we are committed to achieving a greater understanding of the underlying reasons that have seen some of our shareholders being unable to support the resolution.”
During the annual general meeting, 27.67 percent of participants voted against Resolution 16—Renewal of Directors’ Authority to Allot Shares. “Through our shareholder engagement, the board is aware that there is a divergence between prevailing U.K. market practice for FTSE companies to retain an authority to allot in line with the IA share capital management guidelines and governance policies maintained by certain overseas investors, which either do not support a general allotment authority or only support a general authority at lower levels,” BAT wrote.
“Whilst we recognize that some shareholders are unable to support an allotment authority at the level sought, we note this level of authority continues to be supported by the majority of our shareholders and is in line with prevailing U.K. market practice. Although there is no present intention to exercise this authority, we continue to consider that this level of authority is appropriate to maintain flexibility for the company.
“We will maintain dialogue with shareholders for which this authority continues to present concerns and will keep best practice in this area under review.”